Crude Inventories Pale, Oil Prices Extend Gains

An oil tanker is being loaded at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. U.S. West Texas Intermediate (WTI) crude futures were at $58.56 per barrel, up 30 cents, or 0.51 percent, from their last settlement. The global benchmark crude traded at a $9.29 premium to WTI for the same month.

Oil prices rose slightly on Tuesday, as the U.S. Energy Information Administration (EIA) lowered its forecasts for U.S. crude supply for 2019 and 2020.

"While the revision is small, the comforting part for bulls was that the direction of the revision was down rather than up", Harry Tchilinguirian, global oil strategist at BNP Paribas in London, told the Reuters Global Oil Forum. "But we also know that there are a lot of variables that go into a well-supplied and stable oil market", said Hook, a senior policy adviser to U.S. Secretary of State Mike Pompeo. The EIA posts its weekly statistics at 1430 GMT.

State-owned Petroleos de Venezuela and its joint venture partners are struggling to operate wells and other facilities during the power outage that began last week, said a ministry official.

Besides, the IEA had also added that the USA gross crude export would double, which would eventually result in a greater competition for energies in the Asian markets and United States may have the singular authority to dominate the Crude oil price.

Saudi Energy Minister Khalid al-Falih said on Sunday that the production-curbing agreement would likely last until at least June.

Trump "has made it very clear that we need to have a campaign of maximum economic pressure" on Iran, Hook said, "but he also doesn't want to shock oil markets, he wants to ensure a stable and well-supplied oil market".

"I expect to see WTI hitting $60 a barrel in the next couple of weeks as inventories in the USA are impacted by the lack of Venezuelan imports", said Andrew Lipow, president of Lipow Oil Associates in Houston. With the steep fall in the oil rig count, the estimated deceleration in USA oil production might extend to March.

"All the while, the pressure to find alternative buyers for its crude will ramp up as a March 29 deadline approaches for USA refiners to halt their imports", he said.